(1) The loss company:
(a) must be an Australian resident (but not a * prescribed dual resident) throughout the capital loss year; and
(b) must not be a * dual resident investment company in either the capital loss year or the application year.
(2) It must be the case that the loss company was not required to calculate the * net capital loss:
(a) under section 165-114 (because of a change in ownership or control); or
(b) under section 175-75 (because of an injected capital gain or loss).
(3) Also, it must be the case that neither Subdivision 165-CA nor Subdivision 175-CA would have prevented the loss company from applying the * net capital loss in working out its * net capital gain for the application year if it had made enough * capital gains in that year.
Note 1: Subdivision 165-CA deals with the consequences of changing ownership or control of a company. Subdivision 175-CA deals with using a company's net capital losses to avoid income tax.
Note 2: Division 707 affects the operation of Subdivision 165-CA if the loss company made the net capital loss because of a transfer under Subdivision 707-A.
Note 3: A company's net capital gain or net capital loss for an income year is usually worked out under section 102-5 or 102-10.